Building Amendment Act 2008

The first part of this article can be found here.

Contents

• Building Amendment Act 2008 – Mortgagees in Possession of owner/builder dwellings to be treated as owner/builders

• National Guide to Substituted Service

Building Amendment Act 2008 – Mortgagees in Possession of owner/builder dwellings to be treated as owner/builders

The Building Amendment Act 2008 (Vic) which is anticipated to come into force on 1 September 2009 extends the reference or definition of an owner/builder or "a person who constructs a building" to include a mortgagee in possession as well as executors of estates and some others.

As a consequence contracts of sale entered into by mortgagees in respect of all dwellings sold in Victoria after the Building Amendment Act 2008 comes into force will need to comply with the provisions of Section 137B (2) of the Building Act which requires:

• the obtaining of a report from a prescribed building practitioner not more than 6 months prior to entering into the contract of sale and provision of that report to the purchaser

• warranty insurance to be in place together with the provision of a certificate evidencing the existence of that insurance being given to the purchaser

• the contract of sale must set out the warranties contained in Section 137C which are in substance warranties as to the quality of workmanship and materials.

Accordingly, mortgagees in possession selling dwellings built by owner/builders will be warranting to the purchaser:

1. that the work was carried out in a proper and workmanlike manner
2. that the materials used were good and suitable for the purpose for which they were used and unless otherwise stated in the building contract were new
3. the works were carried out in accordance with all laws and legal requirements, including the Regulations.

These obligations apply in respect of any Contract of Sale entered into within the prescribed period which is 6 years and 6 months from completion or if no occupancy permit or final inspection certificate is issued, 7 years from commencement.

If the Contract of Sale is in respect of a non domestic building constructed by an owner/builder, the applicable period is 10 years. If the building is sold within 10 years after the completion of construction, the requirements of Section 137B(2) referred to above will still apply. There are, however, no ongoing warranties as to the quality of workmanship and materials in a like manner to those set out in Section 137C for homes.

National Guide to Substituted Service

At gadens lawyers, we look to provide a national solution to all of our clients. There are however many differences between the laws and the way courts in particular operate in each state.

One issue that all of our national clients face is the issue of substituted service. Whilst many of the requirements are similar in each State, there are differences in the terminology, documents filed as well as what the court requires.

So what is the process?

In New South Wales, Victoria and Tasmania, a notice of motion is filed, together with affidavits in support from the process server as well as a gadens lawyers' employee. In addition, in New South Wales and Tasmania, draft orders are also prepared and filed with the notice of motion.

The documents filed in Queensland, is an application and supporting affidavits from the process server and a gadens lawyers' employee.

A chamber summons is filed in Western Australian together with supporting affidavits and a Minute of Proposed Orders.

South Australia has as its originating document, a non-contentious application which is filed electronically. Also filed are affidavits in support executed by a gadens lawyers' employee exhibiting the process server's report as well as draft orders.

What material needs to satisfy the Court?

There is some consistency on what the Court requires across each of the States with the material setting out attempts to serve the borrower as well as the additional searches undertaken to locate the borrower. The courts will then review the material however and what the Court looks for in each State will vary with this in mind we make the following comments:

• in New South Wales, the affidavit by the process server should set out why the proposed method of service will bring the claim to the defendant's attention. The matter will be dealt with in Chambers without the need for an appearance

• in Victoria, the court will scrutinise the contents of the affidavits and attempts must be detailed and precise and set out why it is believed that the service by the method proposed would bring the claim to the borrower's attention. A hearing date is set and appearance by a solicitor is required

• the affidavits in Queensland need to include a statement that the proposed method will in all likelihood bring the claim to the attention of the borrower. The affidavit also needs to set out that service is impracticable. In Queensland, these matters are generally determined on the papers, however, if some urgency or concern whether the order will be made, an oral hearing is requested

• courts in South Australia, allow the affidavit to include a copy of the process server rather than requiring a separate affidavit from the process server

• the evidence in Western Australia must be sufficient to show that the claim will reach the borrower

• the requirements in Tasmania, are that the affidavit should set out how the proposed method of service will bring the claim to the attention of the borrower. There is no requirement for an appearance as this application is dealt with in chambers.

What methods of service are allowed?

The methods of service also vary depending on the State involved. These include:

• in Queensland, the orders can include posting of the claim but the orders will generally state that it won't deemed to be served until a few business days after posting for it. Alternatively, the claim can be affixed to the property or the court may order both methods of service

• the orders made for Western Australia are usually for service by post at the borrowers last known address and/or the security property or by another method that the Master of the Supreme Court may stipulate. This may include a requirement that a notice be published in the West Australian newspaper

• the orders made in Victoria are usually for service by post or any other method the Master of the Supreme Court stipulates. This could include leaving the proceeding in the mailbox at the borrower's last known address

• New South Wales, the application has 2 rules relating to substituted services. The first is similar to other states, however, in an action for possession only, an order can be made that the claim be affixed to a conspicuous part of the security property. If this method is used, then judgment by default can only be obtained for possession and not for the debt

• in Tasmania, an order may be made that the proceedings be affixed to a conspicuous part of the security property, and like New South Wales, judgment by default will only be given for possession

• the methods of service in South Australia, includes the proceedings being affixed to the security property.

It will be interesting to see whether courts in other jurisdictions follow the decision of the Supreme Court of ACT in December 2008 and allow service of proceedings through Facebook or other social networking sites. The High Court in New Zealand recently allowed service through Facebook.

Conclusion

Whilst much of the material put before the court is similar in each State, there are individual peculiarities for each jurisdiction. This is why it is important for clients to have a national solution for all of its requirements. With our integrated national approach, gadens lawyers meet clients' needs in this regard.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.